Removing Potential Points of Failure in Your Startup Idea

The rise of startup communities all over the world is a great thing. It’s a beautiful sight to see startups blossoming the world over in exotic cities like Santiago Chile, our lovely neighbors Singapore, Taiwan and not forgetting our lovely home Kuala Lumpur, Malaysia. This means that the next economic wave of the internet is upon us and you guys, my friends are the front runners to ride this wave.

However, there are still a couple of barriers we need to overcome for the startup communities in these areas to be bustling with awesome startups and potential investors. And in my super duper humble opinion, one of the most crucial is the ability of entrepreneurs, and potential entrepreneurs to identify, understand and REMOVE “potential points of failure” in their startups.

Photo Credit By chrisscott under Creative Commons

So, what are “Potential Points of Failure” (PPoF)?

PPoFs represent to TOP HURDLES that your particular startup idea needs to overcome for it to have a chance of success. And it’s the job of the CEO/Founder of the company to channel ALL his startup’s resources to solve these hurdles in the fastest possible way.

Let’s have a look at the types of Consumer Internet ideas and the PPoF for each of them. I learnt this the hard way with AtticTV and I will share my story at a later point in this article…

For most consumer internet ideas, the top PPoF is customer acquisition and adoption. The challenge here is that competition for customer attention is so high, that it takes an awesome product and unique marketing ideas coupled with excellent execution of these ideas for it to have a chance to succeed. AtticTV, which aims to be your personal MTV, falls within this category. Where all product and marketing effort is channeled towards 2 main metrics — Customer Acquisition and Customer Retention. So it is pretty clear cut and those represent the core PPoFs of the idea. The initial target market has to be global from the get-go with these startups.

For marketplace related startups, the PPoF is represented by the challenge of fulfilling 2 sides of the equation, i.e. the Supply Side, (for example the apartments up for rent inAirBnB’s case) and Demand Side, (the people who are finding for short-term vacation rentals). The challenge here is to solve the problem of the chicken and egg issue. AirBNB found a great way to do by hacking Craigslist. The bad news for these startups is that it might take longer to be able to reach critical mass for their business to be valuable to users. However, the good news is that if you’re able to achieve it, it would represent a huge barrier to entry to potential competitors. With this model, you have a choice of either going global immediately (possible as seen in the case of AirBnB) or do a city by city roll-out like eBay.

Lastly, the worst possible idea in terms of the number of PPoF will be consumer internet ideas with a huge Business Development element to it (BD). The key will be to assess (honestly) the ability of the team to overcome these hurdles. And if you’re able to, you will build a huge, huge barrier to entry to potential competitors. Examples of these kinds of businesses include Square – where they had to deal with merchants and credit card companies (which is a huge pain), Uber – which had to have all the cabs in NYC have an iPhone for it to work + the customer acquisition problem which they solved rather nicely. My humble opinion would be, unless you are a seasoned veteran with strong existing connections to reduce the PPoF of the business development deals, it would be best to tweak your idea to be able to utilize existing public APIs to be able to get to traction first, then expand into Business Development deals as it goes further along.

Now, back to the story I promised..

Now, before AtticTV, we were working on a startup called Tickade. It aims to be premier non-cash prize casual gaming tournament site on the net. The idea is that people can go on the site, play casual games competitively and create So let us dissect the idea into PPoFs.

1. it needed the best casual games to be on the platform (which we grossly underestimated) to ensure user retention

2. we needed a worldwide physical prize distribution platform

3. we needed a killer customer acquisition strategy as we were competing in a highly competitive space

So, we solved PPoF number 2 pretty quickly by hacking the eBay API to be our global prize distribution platform (which took us a good number of months in itself), but we stumbled on 1 almost immediately when we couldn’t get any of the big boys like Popcap or Wooga to come on board with their games as the BD process was just too huge. So, basically we wasted a good 6 months of our lives chugging away to nothing.

That was when we took a step back to evaluate the opportunity and we decided that as content was the problem, we made the decision to choose a different content medium — videos. And that was how AtticTV was born.

Being in Malaysia or any of the other new startup communities in the world is a challenge in itself. So, we have to do all we can to reduce chances of failure in other parts of our startups that are not within our control. I know that these advice will very well fall on deaf ears for the most of you, but hopefully, it could increase the chances of success for the few that would take it in their stride.